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Stop spending everything you make

Affluence is not measured by your annual income. Affluence is determined by how many of your resources you manage not to spend — the amount of income you keep.

The idea that you should live below your means is obvious, isn't it? It's not like this is the first time you've ever heard of the concept. You know that cutting spending is hard work.

But living paycheck to paycheck is much harder. Believe me. So, I'm guessing if you knew how to stop spending so much, you'd be doing that by now.

Living on less than you earn takes effort. Like swimming upstream or walking up the down escalator, you have to work at going against the flow. It takes a conscious effort to spend less on everything from food to ATM fees, insurance to clothes, and the fun things in life, too.

Sadly, by the looks of what's going on in the economy — climbing credit-card debt, foreclosures and personal bankruptcy filings in the U.S. — too few people are willing to put forth the effort. It seems easier to just spend all you have and then depend on credit to cover the gap between what you need and how much you make.

At the time, it seems fine to have it all now and pay later. Yet we eventually learn the long-term effects of that spending error.

If you are not where you'd like to be with your money, don't assume that's because you make less money than you desire. Increased income does not guarantee a better life.

Think about it: Most likely, 15 years ago your annual income was less than it is now. Perhaps it was a lot less. You believed then if you only made more money you'd be out of debt and on your way to building wealth and securing your future.